Several eurozone bond auctions held on Tuesday boosted confidence due to their positive results

<p>Markets extended gains and recovered losses caused by S&P downgrading of a number of euro nations last Friday, as well as the European bailout fund […]</p>

Markets extended gains and recovered losses caused by S&P downgrading of a number of euro nations last Friday, as well as the European bailout fund on Monday.

18th January 2012 – 8:00am

 

EURUSD

EUR/USD

Range: 1.2742 – 1.2807
Support: 1.2790
Resistance: 1.2740

Euro-dollar closed in New York at 1.2735, off pullback lows of 1.2711, after the rate had seen highs earlier in the session of 1.2810. Risk appetite reemerged into Asia, with early demand lifting the rate from its opening level at 1.2735 to an eventual high of 1.27876. Euro short covering in several crosses, notably EUR-Aussie and euro-CAD, aided the move. The positive sentiment was seen as a reaction to reports that Greece was nearing a debt deal with private creditors, as well as speculation that China could cut its RRR before the end of the month. The market appears to want to be positive towards risk but remains aware that this sentiment could be quickly reversed on negative headlines (eg Greek debt agreement failure). Offers are seen in place from around 1.2790 and said to extend 1.2810 to 1.2820. Further offers at 1.2840-1.2850. Support seen into 1.2740-1.2735, stronger between 1.2710-1.2700.

 

GBPUSD

GBP/USD

Range: 15331-1.5377
Support: 1.5330
Resistance: 1.5360

Cable closed in New York at 1.5334, after pulling back from session highs of 1.5405 to 1.5321. The rate marked overnight lows at 1.5330 into early Asian dealing before getting dragged higher by euro-dollar’s stronger recovery, the move lifting euro-sterling from 0.8305 to a high of 0.8330, as cable clawed its way to a high of 1.5360. Cable was holding off best recovery levels into Europe. Offers remain at 1.5360, a break of 1.5363 to expose the stronger area between 1.5375-1.5385. Above here, the rate can edge back towards 1.5400-1.5410. Support now seen at 1.5330-1.5320 – a break to open a deeper move towards 1.5310-1.5300, ahead of 1.5275-1.5270. Euro-sterling offers remain at 0.8330, a break to open a move towards 0.8345-0.8350. Support at 0.8280.

 

Gold

Range: 1,644.01-1.659.42
Support: 1,642.00
Resistance: 1,667.70

Gold prices moved higher yesterday, aided by higher crude oil prices amid a general ‘risk on’ trading day. Comments from the GFMS also helped sentiment, with expectations of 2000/oz forecast for 2012 or early 2013 on the back of global economic concerns. Physical buying has also picked up along with new demand from sovereigns such as Mexico and Korea. The metal opened yesterday at 1,643.70 and climbed sharply in Asia and Europe to 1,667.70 before easing back in New York to 1,650.35. A small rally was seen into the close at 1,652.10. Asian markets saw an initial dip back to 1,643.90 before jumping back up to 1,658. Support today is at yesterday’s lows of 1,642 and 1,631.50 with resistance at 1,667.70 and 1,678.25.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.